Sydney — Internet giant Google was accused Monday of misleading web users and misidentifying sponsored links in a court case brought by Australia’s consumer watchdog.
The ACCC has brought a two-pronged case against Trading Post and Google – including subsidiaries Google Australia and Google Ireland – for potentially misleading consumers.
The Australian Consumer and Competition Commission (ACCC), is taking world-first legal action in the Federal Court against Google Inc. over allegedly deceptive conduct related to sponsored links on its websites.
The consumer watchdog alleges that Google does not do enough to differentiate “organic” search results generated by the search engine – and those ranked by relevance – from sponsored links which appear at the top of the results page.
ACCC barrister Christine Adamson told the Federal Court that Google was misleading people who thought the ranking of its search results was not influenced by payments from advertisers, Australian Associated Press reported.
“Google represents to the world that its search engine is so good that it can rank, out of the multitudinous entries of the worldwide web, these entries in order of relevance of the user’s query,” she said.
“Part of that reputation is that it is not influenced by money, it is influenced by relevance.”
In particular, the ACCC claims Trading Post breached the Trade Practices Act in 2005 when it used the names of NSW car dealerships Kloster Ford and Charlestown Toyota as hyperlinks to its own site.
However, the links fed through to the website of a rival to the dealerships, the classifieds magazine “Trading Post,” which competes with them for automotive sales.
These hyperlinks appeared in a shaded area titled “Sponsored Links” at the top of the results page, but appeared to be the dealerships’ official sites, or at least affiliated with the dealerships.
Trading Post chose the dealership names through AdWords, a Google commercial program that sets up hyperlinks.
AdWords linked any search on the dealerships’ names to the Trading Post site through a link embedded in the search results.
Trading Post then paid Google “per click,” Ms. Adamson said.
“The ACCC named Google Inc, Google Ireland Ltd and Google Australia Pty Ltd as defendants in the action, along with the Trading Post magazine.”
Google has denied any wrongdoing and said it would vigorously fight the charges.
“After hearing legal submissions, Judge Jim Allsop adjourned the case until October 4.”
Justice Allsop asked: “And that is misleading because there would be results put at the top which are placed there not by reference to relevance but because people have paid to have that?”
“Yes,” Ms. Adamson agreed.
“That is how we found out about it,” she told Justice Allsop.
“Kloster Ford was so outraged by the conduct that they contacted the ‘consumer’ advocate.”
Google’s counsel Anthony Bannon SC successfully argued for orders that the ACCC file summaries of its case against each of the parties, with Justice Allsop labeling its current claim “opaque and repetitious.”
Bannon argued the case should only be brought against Google Inc., and not its subsidiaries, with the joining of foreign parties bringing the complications of foreign laws.
The judge also adjourned the ACCC’s notice of motion to serve outside the jurisdiction, pending clarification on the precise involvement of Google Australia and Google Ireland.
When the ACCC first announced the lawsuit in July, analysts said it would “send a shudder” through the global IT industry as it deals with sponsored links, a major source of income for online search engine providers.
Google Australia spokesman Rob Shilkin later said the company remained committed to providing relevant information to search engine users.
“From the outset, we have said this case is wrongly based and we are now making our arguments to the court,” Shilkin said.